The Bank of England (BoE) predicted it would remain steady following the interest rate increase.

Ms Parsons said of the pound’s improvement later this week: “Today it’s all about UK inflation data.

“Typically rising price pressures would lend the pound support, but Sterling could struggle if investors are concerned that climbing price growth and stagnant average earnings will inhibit consumer spending.”

Interest rates were increased earlier this month from 0.5 per cent to 0.75 per cent for the first time since last year.

In November 2017, they were increased from 0.25 per cent to 0.5 per cent for the first time in almost a decade.